Oil prices maintain mixed feeling but remain above $40 per barrel on Tuesday, as OPEC+ strengthens its effort on supply cut amid improvement in demand as economies open around the globe.
Brent futures traded as high as $43.96 per barrel on Tuesday and a low price of $42.30 per barrel. Although it is currently trading at $42.65 per barrel.
Whereas U.S oil futures, Western Texas Intermediate (WTI) is selling at $40.26 per barrel. It traded at a high price of $41.64 per barrel at one point and a low price of $39.76 per barrel
Western Canadian Select is selling at $31.30 per barrel. It sold at $32.63 per barrel at one point and at a low price of $30.76 per barrel.
Nigeria banner oil Bonny Light closed at $41.94 per barrel.
However, the perceived rise in prices were capped by worries that a worldwide increase in new infections might stall a fuel demand recovery.
The cases of Covid-19 have been on the increase in several states in the U.S. Germany also reported an increase in the virus reproduction rate.
On Monday, South Korea said it was in the midst of a second wave of the coronavirus. In Beijing new cluster of cases is raising another cause of concern.
The World Health Organization reported a record rise in global cases on Sunday, with the biggest gains from North and South America.
However, amid the fears of the rise in the number of new infections, OPEC+ is committed to ensuring that country’s meet their production quota in the record deal that will see 9.7 million barrels of oil cut from oil supply until end of July 2020.
The record deal had an 87% implementation in May, although some countries did not fully adhere to production cap.
Read more; Oil market review – May 2020
Despite the compliance by some countries to the deal, others like Nigeria, Iraq, Angola, Garbon pumped oil more than their quota in May. However, these countries have submitted their plans on how to meet the agreement going forward.
Nigeria, has said it will cut extra 45,000 barrels a day each month between June and September to make up for its 180,000 barrel-a-day overproduction in May.
Read more; The Jump in Oil Price is Very Cosmetic to Me – NNPC Boss Mele Kyari
Iraq only implemented 46% of its promise to reduce supply by 1.06 million barrels a day in May, it will now cut an additional 573,000 a day over the next three months. It’s obligated to lower production by an extra 57,000 in July, and then 258,000 in August and September according to Bloomberg.
Written by;
Ifunanya Ikueze
